The Bank of Latvia has upgraded the country’s GDP growth outlook for 2022 from the previous 1.8% to 2.9%, according to the bank’s representatives.
The central bank explains that the lasting war in Ukraine has a negative impact on the growth of Latvia’s national economy. However, in Q1 2022 Latvia’s GDP growth was more rapid than expected. This has allowed the bank to upgrade the growth outlook.
At the same time the Bank of Latvia has downgraded the country’s economic outlook for 2023 from 3.2% to 2.4%.
The outlook was downgraded because, according to the Bank of Latvia, the price and cost rise is expected to weaken economic activity at the end of the year.
For 2024 Latvia’s GDP growth is expected at 4.2% as opposed to the previous outlook of 4.1%.
The Bank of Latvia expects an improvement of the general mood in the business sector. This is why economic growth rate is expected to speed up.
The Bank of Latvia notes that the country’s macroeconomic outlook was compiled under conditions of high uncertainty caused by the unpredictable direction of Russia’s war and global price development.
Read also: Latvijas Gāze to increase gas tariffs for households up to 89.9%
As previously reported, Latvia’s GDP in comparable prices, according to seasonal and calendar adjusted data, increased by 6.7% in Q1 2022 when compared to the same period of 2021.
In 2021 Latvia’s GDP increased by 4.5%.